ESB on £120m peat station shortlist

THE ESB is on a shortlist of five companies which have been invited to bid in the competition to build and operate the new £120 million peat-fired power station in the midlands.

The consortiums include Powergen of Britain and IVO Energy, one of the world's leading peat electricity generating companies. The others are Intergen and Marubeni Europower. A final announcement on the successful applicant is not expected until the end of the year.

Last year, the outgoing Cabinet allowed the ESB to enter the competition even though it will be the ultimate purchaser of the power from the station.

Bord na Mona, which will supply the peat to the station, was not allowed to enter the competition or join any of the competing consortiums.

The station will use about one million tonnes of peat a year and will produce about 120 megawatts of electricity. It is due to commence operations in 2001.

EU financial support of £21 million has been allocated for the station in the current round of structural funding.

The eventual winner of the competition will finance, build and operate the station, which will sell the electricity to the ESB under a long-term contract.

The project, which is expected to provide employment for 250 full-time and 250 part-time workers, will be located in west Kildare or east Offaly.

The project will also guarantee an indigenous source of electricity in the Republic until at least 2026. Ireland's gas reserves are expected to run out within the next five years, which will give the peat project added importance.

Announcing the shortlist yesterday, the outgoing Minister for Transport, Energy and Communications, Mr Dukes, said Bord na Mona was ensuring it would have stockpiles of peat for the new plant to use.

The shortlist of applicants spans the globe. The ESB has teamed up with Foster Wheeler, a US electricity generator based in New Jersey. Earlier this year, the ESB and Foster Wheeler won a competition to build and operate a waste-to-energy electricity generation site to be located at Ballycoolin, Co Dublin.

Powergen CHP is a subsidiary of Powergen in Britain, which operates electricity generating station in various parts of the world. Last year Powergen's turnover was almost £2.9 billion sterling.

Intergen is a US-based power company, which has plants in the Britain, while Marubeni Europower is a very large Japanese-based electricity group.

IVO Energy is a Finnish company recognised as a world leader in the peat-burning technology business. Industry sources said last night that the company had to be seen as a strong favourite to win the contract.

Reports that British utility companies would object to Brussels if IVO was invited to tender for the contract were played down last night. IVO carried out a feasibility study on the project for Bord na Mona several years ago. It has been reported that British utility companies feel this gave IVO an unfair advantage.

A Government spokesman said he was unaware of any objections. A statement from the independent consultants, Stone & Webster, who were asked to run the competition for the contract, said they were confident the competition process would stand up to any scrutiny.

Mr Dukes, who is himself from Kildare, said the importance of the plant should not be underestimated. However, he said the plant's location would be a matter for the successful bidders. "The winning bidder will be the best judge of where the plant will be located," he said. "Ultimately, it is likely to be located adjacent to the bogs which will be supplying the milled peat."